got this today.
I have settled fully with HMRC and paid up last month....
Vultures still out there, though..... to be ignored?
"
You previously participated in a contractor loans tax avoidance scheme. Whether you realise it or not, you have outstanding actions. You will be in one of the following positions:
(1) You believe you settled with HMRC many years ago and have not engaged with the Loan Charge
(2) You registered to settle with HMRC under CLSO2 but you haven't received your settlement pack
(3) You've received your settlement pack but haven't decided what to do
(4) You've settled with HMRC using CLSO2
(5) You intend to pay the Loan Charge.
In some cases, a combination of the above will apply across different tax years.
Whichever of the above positions you are in, you do have outstanding loans from one or more contractor loan avoidance scheme trusts, and need to decide what to do about them. Doing nothing could result in interest charges, demands for repayment, the invalidation of HMRC settlement agreements or charges for inheritance tax.
Remember, paying your tax does not change the status of the loans. This is true whether you paid an APN, are using the settlement opportunity or are intending to pay the Loan Charge.
Even if you're in the first group above, you will still need to declare outstanding loans to HMRC. We can provide you with the necessary information.
Permanently resolving the loan problem
I am the director of DOR Resolutions Ltd, a UK-based company. I set up DORR to help your trustees to communicate with you about the loans and to bring matters to a conclusion. My team and I will handle any enquiries you might have about the loans. It is also DORR's responsibility to help the trustees to close their trusts down. The trustees have ongoing costs which they intend to collect from those who take no action.
There are several options that might be of interest to you. These are:
(a) Repay your loans in full now
(b) Be released from your loans now
(c) Negotiate a lower payment to HMRC
The rest of this email describes these options in more detail. There is also more information on DORR's web site. If you'd like to see a statement of your loans, DORR has set up an on-line loan statement platform and you can sign in here. Please keep this link private because it contains part of the key to accessing your financial information.
Repayment Options
Remember, whether you paid all your tax has no bearing on whether the loans are outstanding, even if you paid your tax a long time ago. HMRC might treat a loan as if it were income, but even so, it remains a loan. Unless you repaid your loans, which the trustee's records show that you haven't, then the loans are still outstanding.
If you're presently settling your use of contractor loans schemes with HMRC, or if you recently settled, HMRC may require you to arrange to be released from your loans. HMRC say you must do this within 30 days of reaching settlement because of the need to avoid inheritance tax charges. This forces you into option (b) above and restricts how long you can take. Whether you are settling with HMRC or not, your loans are outstanding and you still need to decide what to do about them.
Repay your loans in full
If you repay the loans in full, you will receive from the trustees a deed of exclusion and debt settlement (“DOEDS”), which evidences that you no longer have any obligations to the trust(s). You can review a draft deed using our on-line loan statement platform. The deed will give you finality and legal certainty over your relationship with the trustees. You will know that you can never be charged interest or face an inheritance tax charge, years later. This option is likely to be of interest if your outstanding loan is small. To find out how much is outstanding, sign in here
Be released from your loans
The trustees are aware that not everyone will be able to repay their loans in full, and are prepared to write off (or “release”) 94% of the total. You would need to repay the remaining 6% of the loans. You can spread the repayment over three, six or twelve monthly instalments but there is 16.7% discount available if you pay all at once. The discount reflects the reduced administration costs for the trustees and means you repay only 5%, with the trustees releasing the remaining 95%. To find out what this would cost, sign in here.
When the trustees release you from the loans, they will sign a deed of exclusion and release (“DOER”). The DOER satisfies HMRC’s requirement that those settling arrange to be released from the loans. HMRC will only require you to arrange this after reaching settlement, not before, but you can arrange it at any time. You can review a draft deed using our on-line loan statement platform. Once both you and the trustees have signed, your accounts will be closed, we will hand our records back to the trustees, and you will have no further obligations to the trusts.
You can still choose to obtain a DOER, even if you have not agreed a settlement with HMRC.
If you choose to be released from your loans, whether in a single payment or using a repayment plan, DOR Resolutions Ltd charges an administration fee of £ 250 per trust. This covers our costs, including the legal advice we have taken, drafting your deeds and providing your statement. You pay this fee first. We do not provide tax advice, so you should consult a tax adviser before deciding what to do. We do not make payments to HMRC on your behalf.
Trustees are asking for a partial repayment now because there are ongoing costs that the trustees must cover in order to manage the trusts. By exiting the arrangement now, you ensure that there is no legal basis to collect further repayments from you in future.
If you do nothing, the trustees might start to charge you interest and could take legal steps to recover the debt. They could be forced by a court to do this. You might become liable for inheritance tax at a later date. This might happen on the ten-year anniversary of the establishment of the trust, or if the trust closes, for example.
Negotiate a lower payment to HMRC
There is a potential option if you can’t afford to pay. But this option is only available to those in genuine difficulty. It requires that you engage an advisor, which we will help you with. It does not require bankruptcy and means you will only have to pay your creditors, including and trusts and HMRC, what you can reasonably afford to pay.
You may be in a powerful position to negotiate a lower figure with HMRC. If your adviser recommends this option to you, you should end up paying HMRC only as much as you can afford, yet still legally discharge the debt. And, you could typically have up to five years to pay. The total you would pay to discharge all your unsecured debts, including the trust loans, and all associated costs, could be substantially less than you currently owe to HMRC. This option is known as an Individual Voluntary Arrangement. It is likely to be most useful to those with low asset values and outstanding tax bills that are less than one third of the amount owed to the trust(s). We might still be able to help you even if this doesn't apply, but negotiating the agreement with HMRC could be harder. This option is not for the faint of heart, however, and could affect your credit rating. Your adviser will explain what it involves.
To explore an Individual Voluntary Arrangement, sign in to our on-line statement platform and indicate that you can't afford the other options.
If you're worried and need help
Don't let this get you down. Support is available. The Loan Charge Action Group is a volunteer-led organisation with members just like you. Over a hundred MPs are also helping people in your situation and are taking action in Parliament. Citizen's Advice and The Samaritans can also help if HMRC's demands, and the content of this letter, are getting on top of you. We have started to donate to The Samaritans regularly.
I'd like to reassure you that although you're bound to face further costs with all this, DOR Resolutions and the trustees to whom your loans are owed are trying hard to keep these costs to a minimum and to find legal ways to reduce the impact of the retrospective loan charge legislation. That said, it's important to accept that the tax itself cannot be avoided. Don't be tempted to engage in further tax avoidance. Be wary of anyone charging you a monthly fee and recommending that you delay dealing with either the tax or the loans. Whatever approach you take, you need to make sure you're acting within both the letter and the spirit of the law. The three options contained in this letter all do that.
The importance of tax advice
Finally, I must stress the importance of obtaining sound, independent tax advice. DORR doesn't give tax advice and this email doesn't constitute tax advice. You're free to use any firm you choose, but Templeton Brook are familiar with the situation and have handled similar cases to yours before.
Good luck and best wishes.
Andrew Thompson
Director
DOR Resolutions Limited
DOR Resolutions Limited is a limited company registered in England And Wales. Registered number: 11910189. Registered address: 2 Kenilworth Road, Crosby, Liverpool, L23 3AD."
I have settled fully with HMRC and paid up last month....
Vultures still out there, though..... to be ignored?
"
You previously participated in a contractor loans tax avoidance scheme. Whether you realise it or not, you have outstanding actions. You will be in one of the following positions:
(1) You believe you settled with HMRC many years ago and have not engaged with the Loan Charge
(2) You registered to settle with HMRC under CLSO2 but you haven't received your settlement pack
(3) You've received your settlement pack but haven't decided what to do
(4) You've settled with HMRC using CLSO2
(5) You intend to pay the Loan Charge.
In some cases, a combination of the above will apply across different tax years.
Whichever of the above positions you are in, you do have outstanding loans from one or more contractor loan avoidance scheme trusts, and need to decide what to do about them. Doing nothing could result in interest charges, demands for repayment, the invalidation of HMRC settlement agreements or charges for inheritance tax.
Remember, paying your tax does not change the status of the loans. This is true whether you paid an APN, are using the settlement opportunity or are intending to pay the Loan Charge.
Even if you're in the first group above, you will still need to declare outstanding loans to HMRC. We can provide you with the necessary information.
Permanently resolving the loan problem
I am the director of DOR Resolutions Ltd, a UK-based company. I set up DORR to help your trustees to communicate with you about the loans and to bring matters to a conclusion. My team and I will handle any enquiries you might have about the loans. It is also DORR's responsibility to help the trustees to close their trusts down. The trustees have ongoing costs which they intend to collect from those who take no action.
There are several options that might be of interest to you. These are:
(a) Repay your loans in full now
(b) Be released from your loans now
(c) Negotiate a lower payment to HMRC
The rest of this email describes these options in more detail. There is also more information on DORR's web site. If you'd like to see a statement of your loans, DORR has set up an on-line loan statement platform and you can sign in here. Please keep this link private because it contains part of the key to accessing your financial information.
Repayment Options
Remember, whether you paid all your tax has no bearing on whether the loans are outstanding, even if you paid your tax a long time ago. HMRC might treat a loan as if it were income, but even so, it remains a loan. Unless you repaid your loans, which the trustee's records show that you haven't, then the loans are still outstanding.
If you're presently settling your use of contractor loans schemes with HMRC, or if you recently settled, HMRC may require you to arrange to be released from your loans. HMRC say you must do this within 30 days of reaching settlement because of the need to avoid inheritance tax charges. This forces you into option (b) above and restricts how long you can take. Whether you are settling with HMRC or not, your loans are outstanding and you still need to decide what to do about them.
Repay your loans in full
If you repay the loans in full, you will receive from the trustees a deed of exclusion and debt settlement (“DOEDS”), which evidences that you no longer have any obligations to the trust(s). You can review a draft deed using our on-line loan statement platform. The deed will give you finality and legal certainty over your relationship with the trustees. You will know that you can never be charged interest or face an inheritance tax charge, years later. This option is likely to be of interest if your outstanding loan is small. To find out how much is outstanding, sign in here
Be released from your loans
The trustees are aware that not everyone will be able to repay their loans in full, and are prepared to write off (or “release”) 94% of the total. You would need to repay the remaining 6% of the loans. You can spread the repayment over three, six or twelve monthly instalments but there is 16.7% discount available if you pay all at once. The discount reflects the reduced administration costs for the trustees and means you repay only 5%, with the trustees releasing the remaining 95%. To find out what this would cost, sign in here.
When the trustees release you from the loans, they will sign a deed of exclusion and release (“DOER”). The DOER satisfies HMRC’s requirement that those settling arrange to be released from the loans. HMRC will only require you to arrange this after reaching settlement, not before, but you can arrange it at any time. You can review a draft deed using our on-line loan statement platform. Once both you and the trustees have signed, your accounts will be closed, we will hand our records back to the trustees, and you will have no further obligations to the trusts.
You can still choose to obtain a DOER, even if you have not agreed a settlement with HMRC.
If you choose to be released from your loans, whether in a single payment or using a repayment plan, DOR Resolutions Ltd charges an administration fee of £ 250 per trust. This covers our costs, including the legal advice we have taken, drafting your deeds and providing your statement. You pay this fee first. We do not provide tax advice, so you should consult a tax adviser before deciding what to do. We do not make payments to HMRC on your behalf.
Trustees are asking for a partial repayment now because there are ongoing costs that the trustees must cover in order to manage the trusts. By exiting the arrangement now, you ensure that there is no legal basis to collect further repayments from you in future.
If you do nothing, the trustees might start to charge you interest and could take legal steps to recover the debt. They could be forced by a court to do this. You might become liable for inheritance tax at a later date. This might happen on the ten-year anniversary of the establishment of the trust, or if the trust closes, for example.
Negotiate a lower payment to HMRC
There is a potential option if you can’t afford to pay. But this option is only available to those in genuine difficulty. It requires that you engage an advisor, which we will help you with. It does not require bankruptcy and means you will only have to pay your creditors, including and trusts and HMRC, what you can reasonably afford to pay.
You may be in a powerful position to negotiate a lower figure with HMRC. If your adviser recommends this option to you, you should end up paying HMRC only as much as you can afford, yet still legally discharge the debt. And, you could typically have up to five years to pay. The total you would pay to discharge all your unsecured debts, including the trust loans, and all associated costs, could be substantially less than you currently owe to HMRC. This option is known as an Individual Voluntary Arrangement. It is likely to be most useful to those with low asset values and outstanding tax bills that are less than one third of the amount owed to the trust(s). We might still be able to help you even if this doesn't apply, but negotiating the agreement with HMRC could be harder. This option is not for the faint of heart, however, and could affect your credit rating. Your adviser will explain what it involves.
To explore an Individual Voluntary Arrangement, sign in to our on-line statement platform and indicate that you can't afford the other options.
If you're worried and need help
Don't let this get you down. Support is available. The Loan Charge Action Group is a volunteer-led organisation with members just like you. Over a hundred MPs are also helping people in your situation and are taking action in Parliament. Citizen's Advice and The Samaritans can also help if HMRC's demands, and the content of this letter, are getting on top of you. We have started to donate to The Samaritans regularly.
I'd like to reassure you that although you're bound to face further costs with all this, DOR Resolutions and the trustees to whom your loans are owed are trying hard to keep these costs to a minimum and to find legal ways to reduce the impact of the retrospective loan charge legislation. That said, it's important to accept that the tax itself cannot be avoided. Don't be tempted to engage in further tax avoidance. Be wary of anyone charging you a monthly fee and recommending that you delay dealing with either the tax or the loans. Whatever approach you take, you need to make sure you're acting within both the letter and the spirit of the law. The three options contained in this letter all do that.
The importance of tax advice
Finally, I must stress the importance of obtaining sound, independent tax advice. DORR doesn't give tax advice and this email doesn't constitute tax advice. You're free to use any firm you choose, but Templeton Brook are familiar with the situation and have handled similar cases to yours before.
Good luck and best wishes.
Andrew Thompson
Director
DOR Resolutions Limited
DOR Resolutions Limited is a limited company registered in England And Wales. Registered number: 11910189. Registered address: 2 Kenilworth Road, Crosby, Liverpool, L23 3AD."
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